Market awaits details of bank recapitalisation plan

Irish banking shares the focus of attention this morning as reports of an impending recapitalisation plan for AIB and Bank of Ireland swirled around the market.

At 12.50pm the Iseq index of Irish shares was flat at 2,311.

Although AIB was ahead by the mid-way stage, brokers noted the increase and volumes were slightly smaller given the news emerging on a recapitalisation plan and suggested that the cold snap may have interrupted a number of brokerages in the UK, with many staff having difficulty reaching their offices.

AIB was 4.5 per cent higher on €1.27 with Bank of Ireland slipping 1.5 per cent to 64 cent due to profit-taking after Friday’s close, Dublin brokers said. Irish Life and Permanent, which is not included in the Government’s recapitalisation plans, saw its shares rise 1 per cent to €1.67.

Ryanair, which today posted a third-quarter net loss of €101.5 million but forecast substantial profit next year, saw its shares rise over 6 per cent to €3.05.

Ryanair said today it now expects a smaller fourth-quarter loss than previously anticipated due to lower fuel costs, allowing it to raise full-year guidance to net profit in the €50 million to €80 million range versus an earlier projection of breakeven.

Recruitment firm CPL Resources said today its pre-tax profits almost halved in the six months to the end of December due to the “extremely challenging business and employment background”.

The news sent the company’s shares almost 1 per cent lower at €1.05, giving the company a market capitalisation of around €40 million.

In Britain the FTSE 100 fell 2 per cent by midday, led by banks and oil producers, as investors fretted about corporate profits, but Rio Tinto rose on new it was in talks to sell assets to China.

By 11.33am, the FTSE 100 was down 83.33 points at 4,066.34, after losing 6.4 per cent last month to extend 2008 dismal performance amid the credit crisis and on fears of a deep and severe global recession.